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Stations Build Virtual Duopolies

CW, My Network TV sign deals with digital affiliates 3/24/2006 07:00:00 PM Eastern

When The CW and My Network TV debut Sept. 5, stations in about two dozen small and midsize markets will distribute the networks differently from their big-city brethren. Both The CW and My Network TV have signed affiliation deals with “digital affiliates,” stations that will carry their feed on a secondary broadcast channel.

When viewers in these markets—such as Augusta, Ga., and Duluth, Minn.—tune in to The CW or My Network TV, they will get the same product as any other affiliate. For local broadcasters, however, these deals represent significant opportunities to build new businesses.

As TV stations upgrade to government-mandated digital broadcast, they gain additional spectrum that allows them to carry multiple programming feeds. So far, most are just simulcasting their standard channel and a high-definition feed. But a growing number of stations are experimenting with “multicasting” second and third services, such as NBC's local weather service, NBC Weather Plus.

For these broadcasters, a single station becomes a virtual duopoly. “This is an opportunity to reach different audiences and cross-promote,” says Jeff Marks, president/general manager of WAGT Augusta, an NBC affiliate that will multicast The CW on digital TV. “It also provides more exposure for our advertisers and public service.”

Schurz Communications' WAGT is one of 11 affiliates that will distribute The CW on digital television. Nine other stations, including two Granite Broadcasting outlets, will multicast Fox's My Network TV.

For the new networks, these digital deals are driven by both opportunity and necessity. While most top-75 markets have five or six over-the-air stations, a smaller market may have only four, usually claimed by the Big Four networks. In some areas where there is no available station, The WB and UPN are carried as cable-only channels. The WB cobbled together a virtual station group for its cable-only affiliates, The WB 100+. In other markets, such as Providence, R.I., The WB and UPN are carried on a single station.

Now digital technology is enabling The CW and My Network TV to secure over-the-air carriage. So far, however, the reach is limited. Like analog outlets, digital stations are transmitted free over-the-air and through satellite and cable companies. But, to view a digital station, viewers must have a TV with a digital tuner or subscribe to digital cable or satellite. About 15 million TV sets have the necessary tuner, and a third of cable subscribers opt for digital service, which gives them access to the stations.

The CW will consider digital affiliates alongside pitches from traditional stations, according to Chief Financial Officer John Maata. “We looking for the strongest local partners we can find,” he says. “The programming they have, the management, the promotional abilities—it is all important.”

A digital affiliate can draw off the strengths of its sister station. WAGT Augusta produces a 10 p.m. news for the cable-only WB station in town and plans to add more news. CBS affiliate WKBT Eau Claire-LaCrosse, Wis., will promote its digital My Network TV channel heavily on its primary station.

The digital deals represent a long-term play. When stations give up their analog spectrum (slated for 2009), all broadcast transmissions will be digital, in theory erasing the difference between full-power, low-power and digital affiliates. Toward that end, CBS affiliate WISC Madison, Wis., has been multicasting for 10 years—first carrying The WB, then UPN. This fall, it switches to My Network TV. “If everything holds together,” says General Manager David Sanks, “in February 2009, this will be as good as analog in its reach.”

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